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ITC REVERSAL IN GST

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26 February 2024 Hi

My client providing cab services to another cab service provider and pvt limited companies.They are charging 12% for another cab service provider and for pvt limited companies charging 0% as pvt limited companies pay itself under reverse charge .Our client covered under forward charge.So now we received notice u/s 150 for reversal of input credit due to mixture of 0% under reverse charge and 12% under forward charges..So department is treating our 0% services under exempted services but in reality its not under exempted services.and asked us to reverse itc for common services but we are not providing common services.So question is when pvt limited companies paying tax under reverse charge then how can we pay tax again under forward charge again for same transaction. it will lead to cascading effect of taxes.Kindly guide me what to do in this case need to go for reversal or simply pay tax under forward charge or ask pvt limited companies to pay tax @ 12% or 0%.

26 February 2024 Simply pay tax under forward charge and ask pvt limited companies to pay tax @ 12%.
Once opted for forward tax it's applicable for all the services.

26 February 2024 But companies are saying they cannot pay tax under forward charge bcz govt has exempted pvt limited companies wide notification 22/2019 sr no 15 in case services by way of renting a motor vehicle provided to body corporate by proprietory concern the receipient is liable to pay gst under reverse charge.so companies are paying under reverse charge and also mentioning the same in our invoice copies.So when companies are paying under reverse charge then how can we pay tax or reverse itc under forward charge .it will create double taxation for same transactions.Kindly guide.pvt companies are saying it is exception to forward rules mechanism and cant override any rule wide notification 22/2019 dt 30.09.2019.so clear our confusion.if companies are disagree with forward charge.Bcz there is not lapse of taxation in case of both parties.




26 February 2024 Pay GST at the rate of 12%. In this option, the person is allowed to take input tax credit of all input goods and services subject to general restrictions on the use of input tax credit.
In case of 5% GST paid under RCM you can't claim any ITC

26 February 2024 Sir my question is different if i registered under forward charge and paying @12% and taking full credit but in case if i provide services to body corporates then companies are not allowing to pay tax under forward charge they simply saying companies covered under reverse charge so we cant pay gst under forward charge to companies .so what to do in this case .if we are registered under forward charge then we need to adopt different method for same financial year for companies.if we dont do so like then for government will charge double tax for same bills .govt will charge 12% from us under forward charge and for same bill govt will charge 12 % under reverse charge from companies .How can be like that ?it is impossible.so kindly guide

26 February 2024 Continue with reverse charge 5% and don't claim ITC on that portion.

26 February 2024 HOW TO SEPARATE COMMON CREDIT BETWEEN FORWARD CHARGE AND REVERSE CHARGE SUPPLY.Because its not any exempted supply for me .Taxes are paying both by us under forward charge and pvt ltd companies under reverse charge.

27 February 2024 5% GST is without ITC, lower tax.due to ITC not allowed.
Reverse ITC in proportional to turnover in case of common items.




27 February 2024 Sir one more doubt My services not an exempted supply bcz companies are paying under reverse charge on behalf of me and i am paying under forward charge.so in both case our supply is taxable.It seems it is lapse in gst law.

27 February 2024 It's not a lapse ITC not available in case lower tax of 5%.

27 February 2024 If companies paying tax @ 12 % under reverse charge then need to reverse itc or not

27 February 2024 No need for reversal in such a case






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